Port St. Lucie taxpayers will be paying for Digital Domain studio for 30 years

$39.9 million were issued in bonds to construct Digital Domain Media Group’s Tradition Studios in 2011.

Treasure Coast Newspapers

PORT ST. LUCIE — Taxpayers will be paying for the costs incurred from the construction of the now-defunct Digital Domain studio for three decades, but the city is doing some financial juggling to decrease that burden.

Port St. Lucie has been dipping into its operating fund — money normally used for staff salaries, police and parks — to repay $39.9 million in bonds issued for the construction of the building. Digital Domain went bankrupt last year and stopped making lease payments the city needed to pay off the debt.

The city is expected to close a deal at the end of November to sell Tradition Studio at a loss for $14 million. To alleviate the financial burden of the building's debt, staff will issue new bonds to repay the Digital Domain ones.

That will help lower debt payments by about 55 percent. The procedure is similar to refinancing a home mortgage, Treasurer Ed Fry said.

Here is how it's going to work:

*Annual debt service payments on the $39.9 million issued in bonds are currently about $3.4 million. The city will issue new bonds, as approved on Monday, in the amount of $25 million. The bonds will be backed by a pledge of the public service tax received from Florida Power & Light.

*Port St. Lucie will pay off all of the Digital Domain bonds with money from the new bonds and two other sources: a cash debt service reserve and proceeds from the expected sale of the studio to Vero Beach resident Richard Friedberg. He is expected to close on the property at the end of November and has said he wants to open a museum there.

*The annual debt services for the new bonds will be $1.5 million, Fry estimates. That money will continue to come out of the city's general fund.